Downtown’s decade of development fee exemptions might be coming to an end.
Development fees are reviewed every five years by a city committee.
They are currently being looked at and may be reinstated downtown by July 2009. Builders typically pay a development fee of between $2,400 and $20,000 per residential unit, depending on size and location. They are a one time fee paid by property owners seeking building permits.
The city removed downtown development fees in the 1990s to encourage people to live in the downtown core.
At the time, many people were choosing to live outside of the city. This was blamed for lagging downtown development.
Since then, downtown has become a popular place to live, says Coun. Diane Holmes.
It is currently the only area in Ottawa where builders do not have to pay the fees.
Holmes says she believes it might be time to reinstate the fees.
“Ten years ago it [the exemption] was a major part in bringing development downtown,” she says. “Now people want to live there.”
Holmes says the committee recommended that the fees be reinstated five years ago, but at the the time she felt the exemption was still necessary.
The fees help the city pay for infrastructure and further development.
Not everyone is happy about the possibility of downtown development fees.
Doug Casey, owner of development company Charlesfort Development, says that the city is only reinstating the fees to make money.
He says the downtown core isn’t stable yet, and it needs the city’s support to encourage business and growth.
“There’s no vision as far as I’m concerned in Ottawa as far as smart growth,” he says. “I think it’s just a tax grab.”
He says to encourage smart growth, the city shouldn’t reinstate the fees so downtown can continue to grow.
He also says that the city will take money from downtown and use it to fund infrastructure in the suburbs.
“We end up subsidizing suburbia,” he says.
David Blaine, president of Centretown Citizen’s Community Association, says he supports the reinstatement.
“It [development fees] will provide more funding for the city, and it will also ensure that development is more appropriate…for example, builders won’t go over their height limit,” Blaine says.
He says the city has been struggling financially, and this will provide much needed revenue.
The majority of downtown residences are “empty nesters” who are leaving the suburbs for the convenience of living in the city, says Blaine.
He says this trend will not be affected by reinstating the fees.
High gas prices are also an incentive for people to live in the city to avoid an expensive commute from the suburbs.